ACT Auditor-General s Office. Performance Audit Report

Transcription

1 ACT Auditor-General s Office Performance Audit Report MANAGEMENT OF RECYCLING ESTATES AND E-WASTE Territory and Municipal Services Directorate June 2012.

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3 PA 11/02 The Speaker ACT Legislative Assembly Civic Square, London Circuit CANBERRA ACT 2601 Dear Mr Speaker I am pleased to forward to you a Performance Audit Report titled Management of Recycling Estates and E-waste for tabling in the Legislative Assembly pursuant to Section 17(5) of the Auditor-General Act Yours sincerely Dr Maxine Cooper Auditor-General 28 June 2012 Level 4, 11 Moore Street, Canberra City, ACT 2601 PO Box 275, Civic Square, ACT 2608 Telephone: Facsimile: actauditorgeneral@act.gov.au

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5 CONTENTS List of abbreviations and definitions Report summary and conclusion...3 Introduction... 3 Audit objective... 4 Audit conclusion... 4 Key findings... 5 Recommendations and response to the report... 8 Acknowledgments Background on ACT s waste policy and the ACT recycling estates Background ACT waste policy Policy and strategies relating to ACT s recycling estates Administrative framework for managing the recycling estates Managing the recycling estates Summary Hume Resource Recovery Estate Parkwood Road Recycling Estate Risk assessment and management Managing stockpiling of recycling waste Regulatory functions undertaken at the Parkwood Road Recycling Estate by the Environment Protection Authority and the Justice and Community Safety Directorate (ACT Fire and Rescue) Future development at the Parkwood Road Recycling Estate Computer and television e-waste Summary The strategy for managing computer and television e-waste Management of the implementation of the bans The computer and television e-waste procurement process Contract management Appendix A: Audit criteria, approach and method Audit objective Audit criteria Audit approach and method Appendix B: Eligibility criteria for recyclers Appendix C: Parkwood Road Recycling Estate wind direction and risks Management of Recycling Estates and E-waste

6 LIST OF ABBREVIATIONS AND DEFINITIONS ACT CMCD Australian Capital Territory Chief Minister and Cabinet Directorate CMD Chief Minister s Department (became CMCD in 2011) EDD ESA JACS Minister TAMS E-waste Economic Development Directorate Emergency Services Agency within JACS Directorate Justice and Community Safety Directorate Minister for Territory and Municipal Services Directorate Territory and Municipal Services Directorate Abbreviation of electronic waste. E-waste is consumer goods that incorporate electronic components, such as mobile phones, computers, televisions, DVD players and gaming consoles. Management of Recycling Estates and E-waste

7 1. REPORT SUMMARY AND CONCLUSION INTRODUCTION 1.1 In late 2011, the ACT s new Waste Management Strategy , was released. It replaced the 1996 No Waste By 2010 Waste Management Strategy and in so doing it explicitly included e-waste and gives priority to the Hume Resource Recovery Estate for the development of waste infrastructure. 1.2 ACT NOWaste, within the Territory and Municipal Services Directorate, administers the Government s waste management strategy and manages contracts and service agreements for a range of waste and recycling activities, including contracts for the disposal of discarded electrical and electronic equipment. This type of waste is called e-waste (electronic waste). 1.3 ACT Property Group within the Territory and Municipal Services Directorate is accountable for property management and compliance management of tenant land use. 1.4 ACT NOWaste and the ACT Property Group developed a 2005 Protocol so that ACT Property Group could effectively manage sites in the two ACT recycling estates to achieve requirements of ACT NOWaste. 1.5 The ACT s two recycling estates are Parkwood Road Recycling Estate and Hume Resource Recovery Estate. Development in Parkwood commenced in 1999 and in the Hume Resource Recovery Estate in The generation and disposal of e-waste by households is a growing concern of communities across Australia. Australians are amongst the top ten consumers of electronic technology in the world. Televisions and computers cause the most concern primarily due to their weight and the volume of these products that are now reaching their end of life. 1.7 E-waste in Australia is being managed nationally under the National Stewardship Scheme and the ACT is leading other jurisdictions in implementing initiatives under this scheme. 1.8 The ACT s Select Committee on Estimates, reporting on the Appropriation Bill , noted that: while the Government indicated its support for procurement from social enterprises in June 2010, two previous e-waste contracts in 2009 and 2011 were given to firms based outside the ACT without apparent regard to environmental or social considerations. 1 1 The Select Committee on Estimates , Appropriation Bill , paragraph 9.56, page 177. Management of Recycling Estates and E-waste Page 3

8 Report summary and conclusion 1.9 The Committee recommended that: the Auditor-General should investigate the previously granted e-waste and other waste contracts This report presents the results of a performance audit that examined the administrative effectiveness in managing the recycling estates located at the Parkwood Road and Hume, and computer and television e-waste. AUDIT OBJECTIVE 1.11 The objective of this audit is to provide an independent opinion to the Legislative Assembly on whether: the ACT recycling estates at Parkwood Road and Hume are effectively planned, regulated and managed to optimise recycling activities to meet the ACT s sustainability agenda; and the management of computer and television e-waste is consistent with government legislative and policy requirements Accordingly, the main focus of this audit is on the activities of the Territory and Municipal Services Directorate, in particular the business units of ACT NOWaste and ACT Property Group. However, the activities of some of other Directorates - the Economic Development, the Environment and Sustainable Development (Policy and the Environment Protection Authority), and the Justice and Community Safety (ACT Fire and Rescue) - are also considered when their management and/or regulatory functions affect the recycling estates Appendix A presents the audit criteria, approach and method. AUDIT CONCLUSION Management of recycling estates Overall issues The regulatory waste function under the Waste Minimisation Act 2001 (the Act), needs to be activated. At present the ACT does not have a waste regulator even though this can be enacted under Section 4 of the Act by appointing an authorised person. While such a person may be able to address, to a degree, the issue of stockpiling recycling material under the existing legislation, it could be better controlled if the ACT had a regulation for controlling the storage of waste. The Environment Protection Authority and the Justice and Community Safety Directorate (ACT Fire and Rescue) appear to have fulfilled their regulatory role in accordance with 2 The Select Committee on Estimates , Appropriation Bill , Recommendation 153, page 177. Page 4 Management of Recycling Estates and E-waste

9 Report summary and conclusion legislated requirements with respect to issues considered in this audit. Hume Resource Recovery Estate To assist the future management of this Estate and build on the guidance given by its Master Plan, it is timely for a long-term Estate Management Plan to be developed. Several procurement processes undertaken by ACT NOWaste for the development of the Hume Resource Recovery Estate were considered and all were found to have been conducted in accordance with the appropriate procurement requirements. Parkwood Road Recycling Estate The management of this Estate has been poor. There is evidence of communication failures and unresolved disagreements. There is a need for the purpose of the Estate to be clarified and this used to guide the development of a long-term Estate Management Plan. Also, the ACT Government has incurred considerable costs (approximately $1m) in cleaning up a recycling site (located in the former West Belconnen landfill site) that posed an unacceptable fire risk due to waste material being stockpiled. The rental fees charged at this Estate are significantly below current market rates. It is acknowledged that there is now a commitment to update the 2005 Protocol between ACT Property Group and ACT NOWaste for the management of Parkwood and ensure compliance with its requirements. Computer and television e-waste The ACT Government continues to provide leadership in the management of computer and television e-waste. It was the first jurisdiction in Australia to introduce local bans on these going to landfill, and it is taking the lead in implementing the new National Stewardship Scheme. While this is the case, the planning for these initiatives was not always comprehensive and unanticipated costs particularly related to illegal dumping were incurred. The procurement processes for computer and television e-waste, were generally appropriate and risk based, however there are areas for improvement. KEY FINDINGS 1.14 The audit conclusion is supported by the following findings: Managing the recycling estates (Chapter 3) showed: A Hume Resource Recovery Estate Management Plan is needed to set the short and long-term objectives for the Estate s development. Management of Recycling Estates and E-waste Page 5

10 Report summary and conclusion ACT Property Group has not effectively managed the Parkwood Road Recycling Estate. It may be that this is not occurring because the 2005 protocol is outdated. Renewals of a number of licence agreements were not made in accordance with the intent of the 2005 Protocol. The cost to the ACT Government of a cleanup of a building waste recycling facility s stockpile at the West Belconnen Landfill during was in the vicinity of $1 million. Notwithstanding a recent decline in rental market values, the average rental charge of $3.26 per square metre per annum under the current lease agreements is well below a May 2011 independent rental market valuation of the Parkwood Road Recycling Estate at $33.23 per square metre per annum. ACT Property Group has not been able to effectively retain important corporate knowledge. Consequently, important factors such as risk assessments have not been considered in managing the Parkwood Road Recycling Estate since A 2007 Fire Risk assessment found that the Parkwood Road Recycling Estate presented significant fire hazards to the ACT, especially to nearby suburbs. The Director-General, Territory and Municipal Services Directorate has not appointed an authorised person under Part 4 (Enforcement Power) of the provisions of the Waste Minimisation Act Such a person could enforce the provisions of the Act, including addressing stockpiling of recycling material, to the degree that the legislation allows, even if this is at present limited due to a lack of specific regulations governing the storage of waste. Procurement Hume Resources Recovery Estate The expression of interest process for the direct land sale at Hume Resource Recovery Estate was conducted in accordance with requirements and the evaluation criteria outlined in the expression of interest documents was met. However, the sale is not due to be completed until August 2012, due to the block requiring some earthworks, some two years after commencement of the procurement. Procurement processes for a commercial dry mixed recycling facility at Hume Resource Recovery Estate were followed. In April 2011, a respondent was short-listed but negotiations are continuing. ACT NOWaste advised Audit that a Memorandum of Understanding will be announced in July Page 6 Management of Recycling Estates and E-waste

11 Report summary and conclusion Computer and television e-waste (Chapter 4) showed: Bans on computers (from 2005) and televisions (from 2010) going to landfill have been a major factor in recycling tonnes of e-waste that would otherwise have gone to landfill. The computer and television bans were largely intended to be offset by the collection of user fees from members of the public disposing of their televisions and computers, but there has been a shortfall in income to fund this e-waste recycling activity of around $ out of a total cost of $1.59 million (38 per cent) over the last five years. The shortfall has arisen from unanticipated increases in contract prices and illegal dumping. This has occurred particularly at charity bins located in and around town centres, car parks and suburban shopping centres. Under the Commonwealth regulated and industry funded National Stewardship Scheme computer and television e-waste services are now free to users, and costs that the ACT Government has incurred are unlikely to be incurred in the future. The early adoption by the ACT Government of the National Stewardship Scheme puts in place a firm arrangement for two years to collect and recycle computer and television e-waste. In the first four weeks of these new arrangements, an estimated 700 tonnes of computer and television e-waste was delivered to the ACT s two recycling centres. This is equivalent to a year s recycled e-waste under the former bans. Canberrans no longer need to pay for a service that attracted a fee. This will save them more than $ a year. Significant savings are also expected from a reduction in illegal dumping. The ACT as yet has no long-term monitoring and evaluative framework for its e-waste initiatives. However, under the National Stewardship Scheme the ACT Government will be contributing to annual reports going to the Commonwealth Government on the new scheme and some of the elements of these reports could form the basis of such a framework. ACT NOWaste s financial data on its computer and television e-waste initiatives were not readily available. An important aspect of determining the cost effectiveness of these initiatives is the ability to evaluate financial and other information. Procurement computer and television e-waste The handling of tendering and contract letting for computer and television e-waste contracts between 2008 and 2011 were, in the main, compliant with policy. However, there were significant delays in progressing the procurement and this led to additional cost. Furthermore, in the procurement process, greater attention should have been given to: Management of Recycling Estates and E-waste Page 7

12 Report summary and conclusion balancing social, economic and environmental factors in the e-waste tendering; the potential for prioritising local companies and local solutions; and the use of contract variations. ACT NOWaste failed to monitor aspects of computer and television e-waste contract delivery such as when contracts were expiring and when spending limits had been exceeded. RECOMMENDATIONS AND RESPONSE TO THE REPORT 1.15 The audit has made nine recommendations to address the audit findings detailed in this report Priority should be given to Recommendation 1 (management of the Hume Resource Recovery Estate), Recommendation 5 (administrative arrangements under the Waste Minimisation Act 2001), and Recommendation 6 (management of the Parkwood Road Recycling Estate) In accordance with Section 18 of the Auditor-General Act 1996, a final draft of this report was provided to the Directors-General of the Territory and Municipal Services Directorate, Environment and Sustainable Development Directorate, Economic Development Directorate and Justice and Community Safety Directorate for consideration and comments The Director-General of Territory and Municipal Services Directorate overall response is: The Management of Recycling Estates and E-waste Audit Report is timely and will be a valuable tool to progress the existing internal review of the management issues related to the Estates and E-waste operations. The development and alignment of Estate Management Plans is regarded as key to the ongoing professional management of these critical functions In addition, the Director-General of the Territory and Municipal Services Directorate provided responses to each recommendation. The Director-General of Environment and Sustainable Development Directorate s comments in relation to Recommendation 5 are presented. Page 8 Management of Recycling Estates and E-waste

13 Report summary and conclusion Recommendation 1 (Chapter 3) Management of the Hume Resource Recovery Estate The Territory and Municipal Services Directorate (ACT NOWaste) should enhance its management of the Hume Resource Recovery Estate by developing: a. an Estate Management Plan to guide the short and long-term development of the site; b. a risk management plan for the Estate; and c. a monitoring and evaluation framework to guide an overall assessment of the Estate. (b and c could be part of the Estate Management Plan) Territory and Municipal Services Directorate: Agreed. All actions will be undertaken upon appointment of the Estate Manager. Interim arrangements will mirror the Estate Management Plan proposed for completion for all Estates at Recommendation 2, and be reviewed as development progresses and tenants are in place. Recommendation 2 (Chapter 3) Management of the Recycling Estates The Territory and Municipal Services Directorate (ACT Property Group) should update the 2005 Protocol between ACT Property Group and ACT NOWaste for managing the ACT s recycling estates. Territory and Municipal Services Directorate: Agreed. The protocol will be updated and implemented by July 2013 and will be developed in conjunction with the Risk Management Plan (Recommendation 4), and the Estate Management Plan (Recommendation 6). Once these documents are finalised, appropriate consultation with tenants will occur prior to implementation. The updated protocol will be developed in stages with: Fire Risk Assessment updated by 30 September 2012; full Risk Management Plan review by 31 December 2012; tenant consultation plan and initial consultation by 28 February 2013; Draft Estate Management Plan by 31 March 2013; Management of Recycling Estates and E-waste Page 9

14 Report summary and conclusion Estate Management Plan completed by 31 May 2013; and Revised Protocol adopted by 30 June Recommendation 3 (Chapter 3) Adjustment of the Parkwood Road Recycling Estate rental charges The Territory and Municipal Services Directorate (ACT Property Group) should review and increase rental charges for the Parkwood Road Recycling Estate to reflect current market rates. Territory and Municipal Services Directorate: Agreed. ACT Property Group has commenced work on rental rates through the commissioning of a market review that occurred in Negotiations will commence with tenants as soon as practicable to implement a fair market rent. It is proposed to: complete a tenant consultation plan by 31 July 2012; obtain further valuations to ensure the integrity of the current rental market rates by 31 August 2012; determine the introduction of new rent levels, including consideration of phasing to enable tenants to transition from the site if they decide, as well as alignment of capital works program; commence negotiations with tenants as soon as practicable to implement the rental regime, commencing with renewals; and align the market review with the protocol by 30 June Page 10 Management of Recycling Estates and E-waste

15 Report summary and conclusion Recommendation 4 (Chapter 3) Risk assessment and management plan The Territory and Municipal Services Directorate (ACT Property Group) should: a. finalise its draft Risk Management Plan (June 2011) and draft Tenancies Policy and Procedure Manual (July 2011); and b. develop a specific Risk Management Plan for the Parkwood Road Recycling Estate that includes information from a comprehensive fire risk assessment. This specific Risk Management Plan could form part of the ACT Property Group s Risk Management Plan (a. above) or the proposed Estate Management Plan that is the subject of Recommendation 6. Territory and Municipal Services Directorate: Agreed. The draft Risk Management Plan and draft Tenancies Policy and Procedures Manual will be finalised by July The updated Plan and Policy will be developed in conjunction with the protocol (Recommendation 1), and the Estate Management Plan (Recommendation 6). Once these documents are finalised appropriate consultation with tenants will occur prior to implementation. Recommendation 5 (Chapter 3) Administrative arrangements under the Waste Minimisation Act 2001 The Territory and Municipal Services Directorate should activate its role as the ACT s waste regulator by appointing an authorised person under Part 4 (Enforcement Power) of the Waste Minimisation Act 2001 and this person should: a. foster the development of a waste regulation that controls the storage of waste, in particular stockpiling of recycling products; and b. request that the Environment Protection Authority in the next review of the Environment Protection Act 1997 to work collaboratively with the Territory and Municipal Services Directorate to examine whether it or the Environment Protection Authority should be the ACT s waste regulator. Territory and Municipal Services Directorate: The Directorate agrees in part to the Administrative arrangements under the Waste Minimisation Act, specifically: Management of Recycling Estates and E-waste Page 11

16 Report summary and conclusion a. agreed as an interim measure. This will require resources to develop, implement, report and review the required directions necessary to facilitate regulation of activities under the Act; and b. the review of the Environment Protection Act 1997 should ensure the appropriate regulation of the resource recovery industry occurs without contradiction or replication with regulation provisions under the Waste Minimisation Act Agreed in Part. The activation of the administrative arrangements under the Waste Minimisation Act, specifically: as an interim measure, appoint an authorised person under Part 4 (Enforcement Powers) of the Waste Minimisation Act 2001 based on particular directions that specify the regulation of activities; seek Environment and Sustainable Development Directorate agreement to appoint Environmental Protection Officers as authorised persons under Part 4 (Enforcement Powers) of the Waste Minimisation Act 2001, based on particular directions that specify the regulation of activities; defer the development of controls for storage of waste in particular stockpiling of recycling products until adoption of the new protocol and the Estate Management Plans in Recommendation 2; and engage with Environment and Sustainable Development Directorate during the next review of the Environment Protection Act 1997 to seek the incorporation of appropriate regulation of the resource recovery industry without contradiction or replication of the provisions of the Waste Minimisation Act Environment and Sustainable Development Directorate Environment and Sustainable Development Directorate agrees that the Territory and Municipal Services Directorate should administer the Waste Minimisation Act Environment and Sustainable Development Directorate is developing a detailed policy position on the appropriate regulation of the waste industry as part of the implementation of the ACT Waste Management Strategy Page 12 Management of Recycling Estates and E-waste

17 Report summary and conclusion Recommendation 6 (Chapter 3) Management of the Parkwood Road Recycling Estate The Territory and Municipal Services Directorate (ACT Property Group) should: a. clarify the purpose of the Parkwood Road Recycling Estate and name it accordingly; b. develop an Estate Management Plan to guide the short and long-term development of the Estate; c. develop a risk management plan for the Estate; and d. develop a monitoring and evaluation framework to guide an overall assessment of the Estate. (c and d could be part of the Estate Management Plan) Territory and Municipal Services Directorate: Agreed. As part of the protocol to be developed at Recommendation 2 and the Risk Management Plan (Recommendation 4), the purpose of the Parkwood Road Recycling Estate will be clarified and an Estate Management Plan developed. The Estate Management Plan will incorporate the Risk Management Plan and align with the protocol between ACT Property Group and ACT NOWaste Recommendation 7 (Chapter 4) E-waste monitoring and evaluation framework The Territory and Municipal Services Directorate (ACT NOWaste) should develop and implement a long-term e-waste monitoring and evaluation framework to determine and report on the environmental, social and financial effects of e-waste projects. This should complement national requirements for reporting information but also include specific information on local affects that may not require reporting nationally. Territory and Municipal Services Directorate: Agreed in Part. The E-waste monitoring and evaluation framework will be required to be developed in conjunction with Environment and Sustainable Development Directorate, particularly as it relates to the local affects of the National Stewardship Scheme. Resources to implement monitoring and evaluation will require a successful budget bid. Management of Recycling Estates and E-waste Page 13

18 Report summary and conclusion Recommendation 8 (Chapter 4) Planning, risk and outcomes The Territory and Municipal Services Directorate (ACT NOWaste) should ensure it undertakes adequate planning, identifies risks and possible and probable outcomes, before seeking the Government s commitment to new e-waste service developments whether or not there is budgetary provision for these developments. Territory and Municipal Services Directorate: Agreed. The ACT Insurance Authority has completed risk management training for ACT NOWaste staff. Recommendation 9 (Chapter 4) Procurement processes and monitoring of contracts The Territory and Municipal Services Directorate (ACT NOWaste) should improve its procurement processes and monitoring of its contracts by: a. procurement planning that includes realistic timeframes, explicit consideration of the level of expertise required and available, and the impact on existing service costs due to potential delays; and b. routinely considering existing contract timescales, giving sufficient lead-in time to extending or re-letting contracts; and checking compliance with contract conditions. Territory and Municipal Services Directorate: Agreed. ACT NOWaste will continue its practice of routinely consulting with subject matter experts during the development phase of projects, including stakeholders from the private sector, national and state governments and other ACT Government Directorates. Contract compliance and timing of the re-tendering of contracts is regularly impacted by competing contract priorities and the availability of staff/resources in multiple Directorates. The future potential for outsourcing of Shared Services Procurement resources to Territory and Municipal Services Directorate is seen as a proactive response to these issues. ACKNOWLEDGMENTS 1.20 The Auditor-General s Office acknowledges the co-operation and assistance of the management and staff of: Page 14 Management of Recycling Estates and E-waste

19 Report summary and conclusion Territory and Municipal Services Directorate; Environment and Sustainable Development Directorate; the Justice and Community Safety Directorate; and Economic Development Directorate. in the production of this report. Management of Recycling Estates and E-waste Page 15

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21 2. BACKGROUND ON ACT S WASTE POLICY AND THE ACT RECYCLING ESTATES 2.1 This chapter presents background information on the ACT s waste policy and its two recycling estates; the Parkwood Road Recycling Estate, and Hume Resource Recovery Estate. BACKGROUND 2.2 Managing waste is always a challenge, particularly in the ACT as according to the National Waste Report 2010, we are one of the highest generators of waste per capita in Australia, second only to Western Australia. 3 Table 2.1 presents a summary of ACT waste data and trends by sector for and Table 2.1: Summary of ACT waste totals and trends by sector Waste to landfill site (in tonnes) Change (%) Construction/demolition Commercial/industrial Household waste (domestic collection) Household waste (private delivery) Total waste to landfill (in tonnes) (a) Resource recovery (in tonnes) Demolition waste recycling Garden waste Household/commercial/industrial Total resource recovery (in tonnes) (b) Total waste generated (in tonnes) (a)+(b) Total resource recovery rate (%) Source: ACT NOWaste 3 Environment Protection and Heritage Council, National Waste Report 2010, page 29. Refer Management of Recycling Estates and E-waste Page 17

22 Background on ACT s waste policy and the ACT recycling estates Location of ACT s recycling estates Hume Resource Recovery Estate 2.3 The Hume Resource Recovery Estate is located immediately to the north of the intersection of Mugga Lane and the Monaro Highway, opposite the established Hume Industrial Estate. 2.4 The Hume Resource Recovery Estate is comprised of Sections 25, 26 and 27 Hume, ACT. The land within the Hume Resource Recovery Estate is zoned General Industrial under the Territory Plan 2008 that allows general industry, recycling material collection, recycling facilities, a hazardous waste facility, waste transfer station and community facility (education establishment). Figure 2.1 shows the site map of Hume Resource Recovery Estate. Figure 2.1: Hume Resource Recovery Estate site map Source: ACT NOWaste 2008 Parkwood Road Recycling Estate 2.5 The Parkwood Road Recycling Estate is part of an Executive Crown Lease for Block 1586 District of Belconnen for the West Belconnen Landfill. The Parkwood Road Recycling Estate is located on the western side of Parkwood Road, Macgregor, approximately 200 metres south of the ACT and New South Wales border. The ACT is the registered property owner with a 99 year lease commencing from 1 October Page 18 Management of Recycling Estates and E-waste

23 Background on ACT s waste policy and the ACT recycling estates 2.6 The Territory Plan 2008 is prepared pursuant to Section 12 (1) of the Planning and Development Act Commencement of the Territory Plan 2008 was effective on 31 March 2008 and replaces the Territory Plan The Territory Plan 2008 identifies Block 1586 District of Belconnen as being able to have various developments including landfill site, recycling facility and recyclable materials collection. 4 The site map of the Parkwood Road Recycling Estate is shown in Figure 2.2. Figure 2.2 Parkwood Road Recycling Estate site map Source: ACT NOWaste 2008 ACT WASTE POLICY 2.7 The primary policy document that guides waste management in the ACT is the ACT Waste Management Strategy that replaced the No Waste By 2010 Waste Management Strategy. The new Waste Management Strategy has a focus on managing construction, commercial and garden waste, aiming to achieve resource recovery target of over 80 per cent by 2015, over 85 per cent by 2020 and over 90 per cent by The Environment and Sustainable Development Directorate is the lead agent for providing over-arching policy advice to the ACT Government on waste. It was formed in May 2011 and includes what was the Department of the Environment, Climate Change, Energy and Water (DECCEW) that developed the new ACT Waste Management Strategy which replaced the No Waste By 2010 Waste Management Strategy that had been developed by ACT NOWaste. 4 5 The Territory Plan 2008 is the key statutory planning document in the ACT and zones the Block 1586 District of Belconnen as NUZ3: Hills Ridges and Buffer Areas (NI ). The land uses of the Block 1586 include: agriculture, ancillary use, communication facility, consolidation, demolition, farm tourism, land management facility, major facility installation, nature conservation area, outdoor education establishment, outdoor recreation facility, parkland, roads, scientific research establishment, sign, subdivision, temporary use, and woodlot. Additional development includes landfill site, recycling facility and recyclable materials collection. Environment and Sustainable Development Directorate, ACT Waste Management Strategy , December Refer website. Management of Recycling Estates and E-waste Page 19

24 Background on ACT s waste policy and the ACT recycling estates 2.9 Implementation of the new Waste Management Strategy is being co-ordinated by the Environment and Sustainable Development Directorate. To this end, the Directorate is developing an implementation plan that is to be finalised in the second half of The Territory and Municipal Services Directorate through ACT NOWaste is accountable for implementing key parts of the new ACT Waste Management Strategy. Roles and responsibilities of ACT NOWaste and ACT Property Group 2.10 The Territory and Municipal Services Directorate was created in May 2011 from the Department of Territory and Municipal Services. Prior to 30 June 2006 it was the Department of Urban Services. These entities have been accountable for managing the delivery of waste management services and property services for the ACT community The Territory and Municipal Services Directorate plays a key role in building the ACT s environmental, social and physical infrastructure. It manages and delivers a range of services for the people of the ACT including road infrastructure, public libraries, parks and open space management, environmental and recreational facilities, and Canberra Connect payments and information services The Territory and Municipal Services Directorate is also accountable for managing the ACT Government commercial operations that are in the Business Enterprises Division, and include Capital Linen Service, Yarralumla Nursery, Canberra Cemeteries, ACT NOWaste and ACT Property Group. The latter two are particularly relevant for this audit because of their waste and property management functions, respectively Figure 2.3 presents the organisational chart of the Territory and Municipal Services Directorate (business units accountable for waste and property management are shaded). Page 20 Management of Recycling Estates and E-waste

25 Background on ACT s waste policy and the ACT recycling estates Figure 2.3: The Territory and Municipal Services Directorate Organisation Chart Territory and Municipal Services Directorate Business Enterprises Division Parks and City Services Division Roads and Public Transport Division Canberra Connect Directorate Services ACT NOWaste Canberra Cemetries Capital Linen Service Yarralumla Nursery ACT Property Group Source: Audit Office, extracted from the Territory and Municipal Services Directorate organisation chart, April 2012 ACT NOWaste 2.14 ACT NOWaste manages the domestic rubbish collection and recycling collections for over households in Canberra to protect human health and the environment. It manages three resource management centres, including the domestic Material Recovery Facility and land fill site at Mugga Lane and four regional recycling centres that contain waste and recycling drop-off facilities. It also supports resource recovery by collecting and analysing waste and recycling data, providing educational material and promotional activities, it fosters the development of new recycling initiatives and facilities. ACT Property Group 2.15 ACT Property Group s role includes strategic asset management and managing government and non-government tenancies. It manages the ACT s owned commercial buildings, government office accommodation and community/multipurpose buildings and leased commercial buildings. ACT Property Group also manages several properties that could be considered unique Government assets; the Parkwood Road Recycling Estate, the Hume Resource Recovery Estate and a number of heritage properties, such as Albert Hall and the Tuggeranong Homestead ACT Property Group was a business unit within the Department of Territory and Municipal Services until November 2009 when it was transferred to the Department of Land and Property Services. 6 As a result of the ACT Public Sector 6 Administrative Arrangements 2009 (No 3) of 30 November Management of Recycling Estates and E-waste Page 21

26 Background on ACT s waste policy and the ACT recycling estates (Hawke) Review, ACT Property Group was transferred back to the Territory and Municipal Services Directorate in May POLICY AND STRATEGIES RELATING TO ACT S RECYCLING ESTATES Policy and strategies under No Waste By 2010 Waste Management Strategy 2.17 The No Waste By 2010 Waste Management Strategy supported the ACT Government s Greenhouse Strategy, the guiding principle of Sustainability Policy People Place Prosperity 8, and the Canberra Social Plan The establishment of recycling estates or Resource Recovery Estates was part of the No Waste By 2010 Waste Management Strategy. Resource Recovery Estates were defined in this Strategy (page 23) as facilities that enable material discarded by the community to be re-used and/or recovered The development of dedicated recycling estates would (pages 14 and 15 of the No Waste By 2010 Waste Management Strategy): help to reduce waste and the demand to landfill; encourage the establishment and development of private sector recycling and resource recovery businesses; promote innovative solutions to resource recovery and value-adding; create jobs; and provide a focus for cooperation The Government released two action plans, The Next Step in No Waste Strategy (March 2000) and Turning Waste into Resources Action Plan (July 2004), that provided the strategies and initiatives that guided the establishment of the two recycling estates in the ACT, refer to Table Administrative Arrangements 2011 (No 1) of 17 May The guiding principles of Sustainability Policy People Place Prosperity (issued in March 2003) include: to increase efficiency in using resources, generate less waste and replace the non-renewable resources with renewable resources. 9 The Canberra Social Plan 2004 identifies under Priority 7 "Respect and Protect the Environment", Action 7.3: "the Government will maintain its commitment to reduce the amount of waste generated and promote recycling". Page 22 Management of Recycling Estates and E-waste

27 Background on ACT s waste policy and the ACT recycling estates Table 2.2: Strategies and initiatives recycling estates Recycling estates Hume Resource Recovery Estate Temporary Resource Recovery Estate at West Belconnen Landfill (Parkwood Road) Next Step in No Waste Strategy 10 Action Plan Registration of interest was called in December 1997 to identify potential resource recovery businesses interested in operating in Hume. More than twenty suitable industry operators registered their interest. A temporary Resource Recovery Estate was established to provide assistance to businesses in the form of land and subsidised rental during their establishment phase. Continued development of the Hume Estate to encourage a range of businesses operating within the Estate. The domestic Material Recovery Facility (stage 1) was opened in Establishment of a mixed commercial waste sorting facility was planned. No specific initiative outlined in the Action Plan. Source: Audit Office based on the Action Plans 2.21 The recycling estates at Parkwood Road and Hume were established in accordance with the No Waste By 2010 Waste Management Strategy and the supporting action plans, namely The Next Step in No Waste Strategy (March 2000) and Turning Waste into Resources Action Plan (July 2004) respectively. Importantly, the Parkwood Road Recycling Estate was not considered to be the main recycling facility. Policy and strategies under the Waste Management Strategy The Waste Management Strategy (Strategy 3.3) states that major new recycling waste infrastructure will primarily be located in the Hume Resource Recovery Estate beside the Mugga Lane Resource Management Centre. The Hume Resource Recovery Estate is being developed as a recycling Estate housing a range of facilities. This strategy is silent with respect to the Parkwood Road Recycling Estate The benefits of co-locating waste facilities in the Hume Resource Recovery Estate, including the synergies between different parts of the recycling industry, TAMS, The Next Step in No Waste Strategy March 2000, pages 16 and 17. Refer TAMS, Turning Waste into Resources Action Plan , pages 8, 9 and 11. Refer Management of Recycling Estates and E-waste Page 23

28 Background on ACT s waste policy and the ACT recycling estates could result in increased resource recovery, reduced costs and reduced traffic movements In 1999, the management of the Parkwood Road Recycling Estate was transferred to ACT NOWaste from the then Planning and Land Management (PALM) within the former Department of Urban Services. PALM became ACT Planning and Land Authority in July Prior to the transfer of the management of the site to ACT NOWaste, the site was primarily used to accommodate semi-industrial businesses. The transfer of the Parkwood Road Recycling Estate to ACT NOWaste was to facilitate the requests for land by some recycling operators and intended to provide rental assistance to the recycling businesses establishing their operations in the Parkwood Road Recycling Estate site in the context of the No Waste by Waste Management Strategy. In 2005, there were 44 licence holders (tenants) who leased blocks for various waste management and light industrial activities. Hume Resource Recovery Estate 2.26 Under the National Capital Plan, which came into force in 2003, the National Capital Authority (Commonwealth) was required to develop a development plan known as approach route over what is referred to as the Hume Resource Recovery Estate and the abutting lands. This plan was developed and provides the broad context for development. The ACT Government must meet its requirements in this plan During 2006 and 2007 the ACT Property Group started to develop a plan to guide development in the Hume Resource Recovery Estate but this was never finalised. In its efforts to develop the plan advice was sought from various agencies Legal advice from the Government Solicitor s Office was sought in relation to the existing subleases; a domestic materials recovery facility and ActewAGL. In addition legal advice was also sought regarding the subdivision of the Hume Resource Recovery Estate (Block 16 of Section 23 Hume) which was in contravention to Section 182 of the Land (Planning and Environment) Act The legal advice and restrictions of this Act are discussed in paragraphs 3.23 and The ACT Planning and Land Authority advised that its June 2007 Hume Planning Study (draft concept plan) reported that there was evidence of the presence of archaeological deposits of high cultural significance. Although this might not preclude any future development of the areas in question, heritage issues would need to be considered before any land sale. 12 ACT Planning and Land Authority was established in July 2003 pursuant to the Planning and Land Act Page 24 Management of Recycling Estates and E-waste

29 Background on ACT s waste policy and the ACT recycling estates ADMINISTRATIVE FRAMEWORK FOR MANAGING THE RECYCLING ESTATES Changes in property management responsibilities 2.30 In July 2005, the then Department of Urban Services decided that the management of the Parkwood Road Recycling and the Hume Resource Recovery Estates should be transferred from ACT NOWaste to the ACT Property Group. Also transferred was the management responsibility of the properties located in the site next to the Parkwood Road Recycling Estate (Lot 2056 south of the Parkwood Road Recycling Estate boundary). The 2005 Protocol between ACT NOWaste and ACT Property Group and the new policy framework 2.31 In December 2005 a Protocol was established between ACT Property Group and ACT NOWaste that clarifies the management responsibility of ACT Property Group as having two discrete functions: property management of licences and tenancies, including normal or standard property management services such as compliance with licence conditions of legal usage, rental payments, repairs and maintenance and licence renewals; and compliance management of tenant land usage in accordance with resource recycling policies and standards, including conducting desk and field audits of recycling activities, site inspections for environmental compliance, liaison with tenants in their recycling activities and liaison with ACT NOWaste The 2005 Protocol requires that the ACT Property Group must ensure that: priority of accommodation is always based on those applications that meet the criteria set under the No Waste by Waste Management Strategy. If there are non-recyclers and the number of vacant sites fall below five, then the most recent non-recycler will be given notice to vacate. If the number of vacant sites falls below five, and there are no non-recyclers, a waiting list is established on a first in, first served basis as vacancies occur; the licence term for recycler and non-recycler is: recycler a minimum of five years with one year withdrawal or termination clause existing non-recycler licence offered for five years with one year withdrawal or termination clause new non-recycler licence offered for a maximum of one year with a three months withdrawal or termination clause; ACT NOWaste assesses tenants eligibility as a Class A or Class B Recycler and their entitlement for rent rebates (40 per cent for Class A and 25 per cent for Class B ). Appendix B presents the eligibility criteria used to assess classifications of recyclers as per the agreed Protocol. This enables ACT Management of Recycling Estates and E-waste Page 25

30 Background on ACT s waste policy and the ACT recycling estates Property Group to determine rental rates, licence period and terms or conditions; and it formally meets with ACT NOWaste at least half-yearly or as often as desired to review the operation of the Protocol and make whatever adjustments or additions are necessary. It is also incumbent on ACT NOWaste to ensure that such meetings occur In December 2005, the Minister approved an ACT Property Group recommendation to establish a new policy framework for managing the Parkwood Road Recycling Estate and the Hume Resource Recovery Estate. Importantly it reinforced the roles of ACT Property Group (refer to paragraph 2.31) and the arrangements (refer to paragraph 2.32) for managing the estates On 24 May 2012, ACT Property Group provided Audit with a copy of an ACT Government Guidelines for Managing Recycling Estates and ACT Government Operational Protocol for Managing Recycling Estates. Both these documents contain the same information. However, the former was developed when ACT Property Group was part of the Economic Development Directorate. These documents have not been presented to ACT NOWaste or Executives within the Territory and Municipal Services Directorate for consideration therefore the 2005 Protocol is still current. Waste management legislation 2.35 The Territory and Municipal Services Directorate, specifically ACT NOWaste, is responsible for administering the Waste Minimisation Act 2001 (the Act) which embeds waste minimisation objectives and principles into how waste is to be managed. The Act provides the legal framework for the management, regulation and reduction of waste ACT Fire and Rescue in the Justice and Community Safety Directorate is responsible under the Emergencies Act 2004 for fire and other hazards to public safety. The Environment Protection Authority within the Environment and Sustainable Development Directorate is responsible under the Environment Protection Act 1997 for environmental impacts and risks. Therefore they are both involved in regulating some aspects of the recycling estates but they are not the waste regulator with powers to specifically address the stockpiling of material which is an issue. This is further discussed in the next chapter (refer to paragraph 3.49). 13 Section 5 of the Waste Minimisation Act 2001 (ACT). Page 26 Management of Recycling Estates and E-waste

31 3. MANAGING THE RECYCLING ESTATES 3.1 This chapter examines the administrative effectiveness of the management of the Parkwood Road Recycling Estate, and the development of the Hume Resource Recovery Estate. As development in the Hume Resource Recovery Estate is just commencing no detail review of the management of this Estate is possible. This chapter also considers regulatory issues related to the storage of waste, in particular recycling materials. SUMMARY Conclusion Overall issues The regulatory waste function under the Waste Minimisation Act 2001 (the Act), needs to be activated. At present the ACT does not have a waste regulator even though this can be enacted under Section 4 of the Act by appointing an authorised person. While such a person may be able to address, to a degree, the issue of stockpiling recycling material under the existing legislation, it could be better controlled if the ACT had a regulation for controlling the storage of waste. The Environment Protection Authority and the Justice and Community Safety Directorate (ACT Fire and Rescue) appear to have fulfilled their regulatory role in accordance with legislated requirements with respect to issues considered in this audit. Hume Resource Recovery Estate To assist the future management of this Estate and build on the guidance given by its Master Plan, it is timely for a long-term Estate Management Plan to be developed. Several procurement processes undertaken by ACT NOWaste for the development of the Hume Resource Recovery Estate were considered and all were found to have been conducted in accordance with the appropriate procurement requirements. Parkwood Road Recycling Estate The management of this Estate has been poor. There is evidence of communication failures and unresolved disagreements. There is a need for the purpose of the Estate to be clarified and this used to guide the development of a long-term Estate Management Plan. Also, the ACT Government has incurred considerable costs (approximately $1m) in cleaning up a recycling site (located in the former West Belconnen landfill site) that posed an unacceptable fire risk due to waste material being stockpiled. The rental fees charged at this Estate are significantly below current market rates. Management of Recycling Estates and E-waste Page 27